ALL COMPANIES WITH MORE THAN RS 50 CRORES CREDIT EXPOSURE HAVE TO COMPULSORILY REGISTER AS A LEGAL ENTITY IDENTIFIER (LEI) NOW.

ALL COMPANIES WITH MORE THAN RS 50 CRORES CREDIT EXPOSURE HAVE TO COMPULSORILY REGISTER AS A LEGAL ENTITY IDENTIFIER (LEI) NOW.

The Reserve Bank of India (RBI) has  made LEI compulsory for companies and organisations having aggregate fund-based and non-fund based exposure of credit over RS 50 Crore.

WHAT IS A LEI?

The Legal Entity Identifier (LEI) initiative is designed to create a global reference data system that uniquely identifies every legal entity, in any jurisdiction, that is party to a financial transaction. More specifically, LEI is a unique 20 digit code that is assigned to a legal entity.

SCHEDULE FOR IMPLEMENTATION OF LEI FOR LARGE CORPORATE BORROWERS (ACCORDING TO RESERVE BANK OF INDIA)

TOTAL EXPOSURE TO BOTH FUND AND NON-FUND BASED LIMITS	LEI REGISTRATION TO BE COMPLETED BY
₹ 1000 crore and above	Mar 31, 2018
Between ₹ 500 crore and ₹ 1000 crore	Jun 30, 2018
Between ₹ 100 crore and ₹ 500 crore	Mar 31, 2019
Between ₹ 50 crore and ₹ 100 crore	Dec 31, 2019

HOW LEI HELPS BANKS AND COMPANIES?

Legal entity identifier will help banks and credit providers in monitoring the exposure of corporate borrowers. It will prevent banks from issuing multiple loans against the same collateral. Companies can order LEI from any Local Operating Unit or use the help of service providers .

Legal Entity Identifier (LEI) in simple terms

·        LEI - Legal Entity Identifier - a unique number / code to identify a legal entity. It can also be used as an international company registration number.

·        A unique identification code (LEI) for companies which trade with securities.

·        Every deal conducted in the markets will connect to the other counterpart with an LEI code.

·        Regulators (such as Central Banks) use it to oversee financial markets. LEI connects financial markets, companies and regulators.

• ·       Legal Entity Identifier is endorsed by the G20 countries.
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• ·        The Legal Entity data related to the LEI is free of charge and accessible from the GLEIF database.
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• ·        The issuing of an Legal Entity Identifier is conducted under GLEIF-accredited LOUs.

·        GLEIF - Global Legal Entity Identifier Foundation. Endorsed by the G20 countries and created by the Financial Stability Board. Governed by the  LEI Regulatory Oversight Committee (LEI ROC)